Geithner: There will be no 'second wave' crisis

[The Northerner]

Source: San Fransisco Chronicle

WASHINGTON — Treasury Secretary Timothy Geithner said on Tuesday the Obama administration is confident it will prevent a repeat of last year's financial crisis, the worst to hit the country in seven decades.

"We are not going to have a second wave of financial crisis," Geithner said in an interview with National Public Radio. "We cannot afford to let the country live again with a risk that we are going to have another series of events like we had last year. That is not something that is acceptable."

Geithner, interviewed on NPR's "All Things Considered" program, rejected the idea that a serious new crisis could be triggered by lingering problems with commercial real estate loans or with a sudden weakening in the value of the dollar.

"We will do what is necessary to prevent that and that is completely within our capacity to prevent," he said.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/12/22/financial/f160304S44.DTL

[Donnachaidh]

1. he must have the printing presses working overtime

"We will do what is necessary" means more money to the banks that are giving out billions in bonuses this week. After the first of the year, of course.... :eyes:

[DJ13]

2. Thats reassuring coming from him

:scared:

[PM Martin]

3. So when does the second wave occur then?

[AllyCat]

13. Presumably when the commercial real estate bubble bursts this spring

I don't know much about it, but I can't see that these crooks have done anything to stop it from happening again. It'll probably happen then.

[EFerrari]

36. I thought it was already broken. Some of the most depressed friends

and family I have are in commercial real estate.

[laughingliberal]

42. Not only that but the delay on HCR has Obama back to focusing his SOTU on...

ta...da...deficit reduction. Care for a little 1937 redux, anyone?

[notesdev]

24. Second wave imminent

First Q 2010 is going to be ugly indeed...

[truedelphi]

27. Meanwhile a survey says that 8 out of 10 Americans believe the

Economy to be wretched.

[MannyGoldstein]

4. Did You Know Timmy Was In 'Animal House'?

It's true:

http://www.youtube.com/watch?v=zDAmPIq29ro

[Donnachaidh]

8. LOL!

absolutely appropriate...

[DavidDvorkin]

5. DU strongly disagrees!

Rejects optimism! Predicts imminent disaster!

[JDPriestly]

25. Why am I pessimistic?

Because we cannot have a healthy economy without jobs. A jobless recovery is no recovery at all.

And, as long as we are merely a consuming society, and not a society that manufacture and produces things, we cannot have a recovery with jobs.

Some people have suggested that we don't need manufacturing jobs because we think up ideas. That is absurd. As soon as the Chinese and Indians, for example, have the economic wherewithal, they will begin creating the ideas. The ideas come to those who have the means, the manufacturing capacity and the capital, to realize their ideas.

The U.S. has lost so much of its productive capacity and so many jobs that Americans don't even have any industry in which to learn how to make things, do things, etc. All American kids know is watching TV, playing sports, listening to music (made mostly by others), video games and learning academic stuff (if they have the gift for academic work). What things can your children actually do or make that they could sell to another person? What things does America produce that we can sell to other countries other than the ideas for weapons systems. I doubt that we even really produce all the parts for the weapons -- maybe a few, but only a few parts.

We are a debtor nation on every level. I do not see how we can recover as long as we import all the junk that the junk stores can shovel on to their shelves and make nothing ourselves.

[DeSwiss]

28. +1

[dmallind]

31. Where do you think we rank in world manufacturing output? NT

[NickB79]

37. What percentage of the US economy is consumer-based? NT

[JDPriestly]

45. In all honesty -- pretty low on the list.

But I'm talking about real manufacturing, not just assembling parts made elsewhere.

I do not know a single person who works in manufacturing something. I used to know lots of them.

I know of lots of factories and mills and manufacturing facilities that have closed including Maytag in Newton, Iowa and the various IBM manufacturing facilities in northern California and even in New York. Then, of course, there is Detroit. Lots of automobile plants in Ohio have reduced their production or closed.

It's very bleak. I do not trust the glorious numbers that the accountants of big companies trump up in order to fool people into silence.

This Christmas, the stores carried very few products made in the U.S.A. It's horrifying.

[ArcticFox]

35. agree

I've thought up many many really awesome ideas. A lot of good it's done me. I have nothing with which to make them a reality.

Unfortunately, America will be coming up with ideas less and less in the future as our educational system and culture continues to degenerate.

The root problem is the transfer of wealth from the poor and working classes to the rich, from the public sector to the private sector. I'm not too optimistic we can dig ourselves out of this hole.

[laughingliberal]

43. I gotta go with: that about nails it. nt

[izquierdista]

6. But those Alt-As will reset in 3........2......

[Demeter]

7. LOLOLOLOLOLOLOLOLOLOLOL ROFLMAO!

Oh, Timmy! You are such a fool! Now it's recorded for the ages just how big a lying, self-serving idiot you are.

Do you, with your little lily-white hands, expect to stop Blankfein from doing "God's Work"? Are you single-handedly going to disarm the Class warfare that has brought us to this point?

Are you even going to actively enforce what few rules still exist in the books?

Or maybe this is a new gig, for Saturday Night Live or some other comic venue?

[UpInArms]

9. Geithner is an idiot and has been WRONG in every way

every time.

This is no different.

[bertman]

10. Listen to the soothing voice of the man in the expensive suit. Allow your eyes to follow

the shiny, slowly-undulating, golden pendant that swings below his hand.

Keep one hand on your wallet and one on your pistol, because this son of a bitch will look you in the eyes and rob you blind. And smile and tell you how lucky you are.

[AllyCat]

14. And that ain't no joke either. Nice images.

[bertman]

18. Thanks, AllyCat. nt

[laughingliberal]

44. Yep. Next up: The steps we took kept the 2nd wave from being as bad as it would have been nt

[FirstLight]

11. Well, now we KNOW we'd better prepare...

I se that headline and think "HA! Famous Last Words..."

...people are still losing their homes at an alarming rate, those who are living off of Credit are going to hit the fan too, and there are no JOBS in sight...at least not here on the GROUND (maybe in the "stats" but NOT in REALITY)

so yeah, keep on saying that things are fine and it's all going to get better and 'Trust me' as you pick our pockets some more and find new ways to screw us while we are down...I just don't buy it.

This doesn't mean that I think Obama is behind it all, nor does it mean I think he can unfailingly fix it all...
I think the machine is in motion, capitalism as we know it is shifting... and he will be hard pressed to stop the behemoth of cataclysm that is coming down the pike.

how uplifting I am tonight! :toast: Merry Christmas!


side note: now is a good time to get to know your neighbors, start sharing skills with those you can help and get your own 'barter system' going... come spring, every one of us who has a place for pots or a patch of dirt should be growing food. The more we learn on reliance without the help from the 'state' or the power of our oil or money, the better ...jus' sayin'

[JDPriestly]

26. The people who are losing their homes now are wealthier and

quieter about it. Some of them have good jobs. Some of them have their own businesses and borrowed against their houses when the economy first worsened but before the fact that it had worsened was widely recognized. These people held out the longest. So the misery is moving up.

[FirstLight]

39. Folks I know are left with nothing, they are not wealthy by any means!

One couple i know, the husband had Cancer in the summer of 08...they didn't borrow against their house to pay medical bills, but had to dip into savings...then the crash happend and wiped them out.
~~
My sister lost her job in early 08, and her husband, who had been a sucessful painting contractor in the Bay Area started to lose business by summer 08...by this time last year, they were sweating bullets... he had to stop contracting on his own and go to work for someone else and commute 3 hours a day or more to just make a fraction of what he was used to...they just kept siding backwards and there was no foothold, and there still is no job secutiry or income stability for them. But they own a car, so they don't qualify for assistance. (That's right, if your car is valued at over a certain amt ($2500 or so) you are NOT eligible for foodstamps or assistance...because you are suposed to SELL your car for food, etc. and not ask for help unless you have exhausted all of your other options...Try rebuilding a life after losing everything of value, and how scary it is.)

These people are not wealthy, maybe a few years ago they would have been seen as 'doing well' but not over the top. They had credit, and maybe having that to lean on made them think they were doing better than they actually were...
now they have lost not only the house but most of the stuff IN it, and haven't even figured out where to try and rent, etc..besides, who has a deposit at this rate?


The housing bubble was just the beginning, now it IS creeping upwards, I agree... those who were even on 'solid ground' just a few years ago are sliding into the abyss...

[AllyCat]

12. Gee Tim, and what have you and your lot done to prevent it?

Just saying it can't be so won't stop it from happening. For us. For you, you'll be fine. A$$wipe.

[BlueJac]

15. Fuck you Timmy

[aaronbav]

55. +1000

[Billsmile]

16. Name ONE Good Thing He's Done? NFM

Okay already. I meant for non Goldman Sachs people.

[boppers]

17. It was a good interview, and a shot across the bow.

Big changes are coming after healthcare. BIG ones.

If I had any money in financial stocks, I'd be selling as fast as I could.

[tomm2thumbs]

19. 'Commercial Real Estate' - coming like a freight train

all the folks on the inside know about it

[truthisfreedom]

48. CRE, Alt-A, ARM, and the really big one... the end of the boomer investors in 2012.

http://thegreatbustahead.com/

[buckrogers1965]

20. No comfort.

This from the same people that claimed for a year that we weren't in a recession.

[Mark Twain Girl]

21. Well, he's sort of right -- there will never be a crisis for him and his cronies. nt

[Garam_Masala]

22. Does any one recall what Ben Bernanke said in 2007?

He said "There is no chance of the sub-prime problem affecting main street economy"
(paraphrasing a little).

So I don't put much faith in these guys whose job is to soothe the unwashed masses
from panicking.

[Mithreal]

23. Oh no. I wish he hadn't said that.

[dysfunctional press]

29. thanks for the assurances, tim. btw- who's paying the mortgages on all those empty strip malls?

:shrug:

[DeSwiss]

30. Methinks you need a new mirror Timmy.....

[Odin2005]

32. Uh-Oh, that means the exact OPPOSITE will happen.

:scared:

[Javaman]

33. aka "the rich won't experience a second wave"...

while the rest of us will be going through many more waves.

little tiny tim can go fuck off.

[ArcticFox]

34. That's Orwelian-speak

For: "The economy is going to crash again."

Seriously, he's lecturing the economy like he would a five-year-old: "That's just unacceptable, young man!"

[fascisthunter]

38. oh yes there will be.... it's called a populist uprising to wash your fascist filth down the drain

then to hold you accountable. Today is just one of many days ahead.

All after you prove yourself to be the same liar you were years ago.

[Vidar]

40. We're unsinkable--just like the Titanic.

[DebbieCDC]

41. Well, I feel SO much better now

What a relief :sarcasm:

[hunter]

46. Hooray! The Wizard is going to give me a DIPLOMA!

I'm going to have so many brains I won't know what to do with them!

[BadGimp]

47. If Little Timmy says no 2nd Wave then it's all but guaranteed TO HAPPEN

as in it's time to worry..

Remember it was the increasing number of Sub Prime mortgage resets that triggered all the defaults, that drove the foreclosures, that caused the banks to panic, and the buyers of the credit default swaps to panic and that caused the money markets to shit the bed etc, etc, etc

Well take a look at this graphic (shown here on DU before). We have a HUGE number of resets of the Option "Arm" mortgages that does not peak till MID 2011, and does not tail off till early 2012. Keep in mid it can take 6-9 months after a reset happens for the at risk properties to default or go into foreclosure. I do not see how we are anywhere close to out of the woods.



But what do I know. I'm just a dumb Venture Capitalist.

[tedzbear]

49. Yeah Timmy, print more money...

...until we end up with hyperinflation like Germany in the 30s.

[hatrack]

50. No indeed! Instead, we'll just have a few hundred (or thousand) banks fail . .

which is TOTALLY DIFFERENT than a "second wave" crisis.

[TheWatcher]

51. Where Oh WHERE are all of the Apologists, Cheerleaders, and True Believers On This?

Why are they not defending their "God" who "saved" them from "Economic Doom"?

Why are they not here gnashing their teeth and Copying and pasting their Talking Points/Propaganda to set us all straight?

Don't tell me they have forsaken Goofy, one half of their Lord And Savior (Helo Ben Being The Other Half).

Say it isn't So!

[No Elephants]

52. I sure do hope he's correct.

[aaronbav]

53. WE can add that quote - Right up there with Bernakes's "Sub-Prime is CONTAINED"

quote!

[quaker bill]

54. He is just stating the obvious

It is in his and Bernanke's control to prevent it. It will not happen. This is less a prediction and more a policy statement.

[Bo]

56. LOLOLOLOL COMMERCIAL LOANS A COMING DUE

WHAT AN IDIOT...ANY ONE THAT WORKED IN BANKS KNOWS COMMERCIAL IS NEXT.